EXHIBIT 10.44
LOAN AND SECURITY AGREEMENT
This Loan and Security Agreement (this "AGREEMENT"), dated as of
November 6, 1998, is entered into by and between Waste Recovery, Inc., a
Texas corporation (the "COMPANY"), and Fidelity Funding, Inc., a Texas
corporation ("FIDELITY"). In consideration of the mutual covenants and
agreements contained herein, the Company and Fidelity hereby agree as follows:
SECTION 1. DEFINITIONS AND RULES OF CONSTRUCTION.
1.1 When used herein, the following terms shall have the following
meanings:
"ACCOUNT" means the right of the Company to payment for goods sold or
leased or for services rendered by the Company which is not evidenced by an
instrument or chattel paper, whether or not earned by performance.
"ACCOUNT DEBTOR" means the Person obligated to make payment on an
Account.
"ADVANCE" has the meaning given to it in Section 2.1.
"AFFILIATE" means, with respect to any Person, any other Person that
directly or indirectly controls, or is controlled by or under common control
with, such Person.
"BAYTOWN FACILITY" means the Company's place of business located at 0000
Xxxx Xxxx, Xxxxxx Xxxxxx, Xxxxxxx, Xxxxx 00000.
"BORROWING BASE" means an amount, determined by Fidelity from time to
time, equal to 80% of the face amount of Eligible Accounts of the Company.
Fidelity may change the percentage of Eligible Accounts constituting the
Borrowing Base from time to time based upon dilution and other factors deemed
appropriate by Fidelity.
"BORROWING BASE CERTIFICATE" means a certificate in the form attached
hereto as Exhibit A, duly executed by an authorized officer of the Company.
"CAPITAL EXPENDITURES" means, for any period, the aggregate expenditures
by the Company during such period that are classified as capital expenditures
in accordance with GAAP.
"CASH COLLATERAL" has the meaning given to it in Section 7.
"COLLATERAL" has the meaning given to it in Section 6.
"CONCENTRATION LIMIT" means, as of any date, an amount equal to 20% of
the face amount of Eligible Accounts of the Company outstanding on such date.
"CONTRACT RATE" means, prior to the occurrence of an Event of Default or
an event or circumstance that would, with the giving of notice, the passage
of time or both, constitute an Event of Default, a rate of interest equal to
the lesser of (a) the Prime Rate in effect from time to time plus 3.00% per
annum and (b) the maximum rate permitted by applicable law and means, after
the occurrence of an Event of Default or an event or circumstance that would,
with the giving of notice, the passage of time or both, constitute an Event
of Default, a rate of interest equal to the lesser of (x) the Prime Rate in
effect from time to time plus 8.00% per annum and (y) the maximum rate
permitted by applicable law. The Contract Rate shall be automatically
increased or decreased, as the case may be, without notice to the Company
from time to time as of the effective date of each change in the Prime Rate.
"CURRENT ASSETS" means, as of any date (determined on a consolidated
basis, without duplication), only those assets of the Company that may, in
the ordinary course of business, be converted into cash within a period of
one year from such date, but excluding (a) amounts due from employees,
officers, shareholders or directors of the Company, (b) prepaid expenses for
services or for supplies that are not purchased for resale, (c) amounts due
from any insurance company as business interruption insurance or fire and
casualty insurance, and (d) amounts due from Affiliates of the Company.
"CURRENT LIABILITIES" means, as of any date (determined on a
consolidated basis, without duplication), the Advances outstanding on such
date and all other Obligations of the Company that are due within one year
from such date.
"DCR REQUIREMENT" means (i) with respect to any date on or after January
1, 1999, but on or prior to March 31, 1999, 0.35 to 1.00, (ii) with respect
to any date on or after April 1, 1999, but on or prior to June 30, 1999, 0.50
to 1.00, (iii) with respect to any date on or after July 1, 1999, but on or
prior to December 31, 1999, 1.00 to 1.00, and (iv) with respect to any date
on or after January 1, 2000, 1.10 to 1.00.
"DEBT" means, with respect to any Person, all indebtedness, obligations
and liabilities of such Person, including without limitation: (a) all
liabilities which would be reflected on a balance sheet of such Person
prepared in accordance with GAAP, (b) all obligations of such Person in
respect of any guaranty of any Debt of another Person, and (c) all
obligations, indebtedness and liabilities secured by any lien on or security
interest in any property or assets of such Person.
"DEBT SERVICE COVERAGE RATIO" means, as of any date (determined on a
consolidated basis, without duplication), the ratio of EBITDA for the
twelve-month period ending on such date (or, in the case of any date prior to
December 31, 1999, the ratio of EBITDA for the Period from January 1, 1999
through such date annualized) to the sum of (a) the Interest Expense incurred
by the Company the twelve-month period ending on such date (or, in the case
of any date prior to January 1, 1999, the ratio of EBITDA for the Period from
December 31, 1999 through such date annualized) (b) all scheduled principal
payments on all Debt for money borrowed or assets financed under capitalized
leases by the Company (including the Obligations) for the twelve-month period
beginning on such date (including all scheduled principal payments on Debt
expected to be incurred during such period).
"EBITDA" means, for any period, the sum (determined without duplication,
on a consolidated basis and in accordance with GAAP) of (a) the Company's net
income (or net loss) (including gains and losses from the sales of assets in
the ordinary course of business) for such period before provisions for income
taxes, (b) the Interest Expense of the Company for such period, and (c) any
depreciation or amortization expenses incurred by the Company in determining
its net income (or net loss) for such period.
"ELIGIBLE ACCOUNTS" means, at the time of determination thereof, all
Accounts other than (i) any Account which is payable more than 30 days from
invoice date, (ii) any Account which has been outstanding for more than 90
days from invoice date, (iii) any Account as to which Fidelity does not have
a valid and perfected, first priority security interest, (iv) to the extent
that the aggregate outstanding Accounts owed by any single Account Debtor
exceeds the Concentration Limit, any Account owed by such Account Debtor, (v)
any Account that is owed by an Account Debtor that is an Affiliate of the
Company or an officer or employee of the Company, (vi) any Account that
arises out of a sale made or services performed outside of the United States
or that is owed by an Account Debtor located outside the United States, (vii)
any Account that is owed by a creditor or supplier of the Company or with
respect to which any defense, counterclaim or right of set off has been
asserted, (viii) any Account owed by an Account Debtor if more than 25% (in
dollar amount) of such Account Debtor's Accounts have been outstanding more
than 90 days from invoice date, (ix) any Account that is owed by the United
States or any department, agency or instrumentality thereof, unless the right
to payment under such Account is assigned to Fidelity as Collateral in full
compliance with the Assignment of Claims Act of 1940, as amended (31 U.S.C.
3727), and (x) any Account that has not been approved by Fidelity for
inclusion in the Borrowing Base.
"ELIGIBLE MACHINERY AND EQUIPMENT" means, at the time of determination,
all machinery and equipment that (i) are owned by the Company, are located in
the United States of America and, if located on leased or mortgaged premises,
are subject to the terms of a lien waiver letter executed by the landlord or
mortgagee of such premises if deemed necessary by Fidelity in its sole
discretion, (ii) are not on lease or consignment to any Person, (iii) are
subject to an enforceable, first priority, perfected security interest in
favor of Fidelity, (iv) are not, in the opinion of Fidelity, damaged or
obsolete, (v) are not fixtures, and (vi) have been approved by Fidelity as
Eligible Machinery and Equipment.
"ENVIRONMENTAL LAWS" means any and all federal, state, local and foreign
statutes, laws, regulations, rules, orders, licenses, agreements or other
governmental restrictions relating to the environment or to emissions,
discharges or releases of pollutants or industrial, toxic or hazardous
substances into the environment, or otherwise relating to the manufacture,
processing, treatment, transport or handling of pollutants or industrial,
toxic or hazardous substances.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, together with all rules and regulations
promulgated with respect thereto.
"ERISA PLAN" means any pension benefit plan subject to Title IV of ERISA
maintained by the Company or any Affiliate thereof with respect to which the
Company has a fixed or contingent liability.
"EVENT OF DEFAULT" has the meaning given it in Section 9.
"FACILITY LIMIT" means $2,500,000.
"GAAP" means generally accepted accounting principles and practices as
promulgated by the American Institute of Certified Public Accountants,
applied on basis consistent with past practices.
"GUARANTOR DOCUMENTS" means the general continuing guarantees executed
by each guarantor of the Obligations and all other documents and instruments
executed and delivered in connection herewith or therewith.
"INDEMNIFIED CLAIMS" means any and all claims, demands, actions, causes
of action, judgments, liabilities, damages and consequential damages,
penalties, fines, costs, fees, expenses and disbursements (including, without
limitation, fees and expenses of attorneys and other professional consultants
and experts in connection with any investigation or defense) of every kind,
known or unknown, existing or hereafter arising, foreseeable or
unforeseeable, which may be imposed upon, threatened or asserted against or
incurred or paid by any Indemnified Person at any time and from time to time,
because of, resulting from, in connection with or arising out of any
transaction, act, omission, event or circumstance in any way connected with
the Collateral, the Transaction Documents or the Guarantor Documents
(including but not limited to enforcement of Fidelity's rights thereunder or
the defense of Fidelity's actions thereunder), excluding with respect to any
Indemnified Persons, any of the foregoing resulting from such Indemnified
Person's gross negligence or willful misconduct.
"INDEMNIFIED PERSONS" means Fidelity and its officers, directors,
shareholders, employees, attorneys, representatives and Affiliates.
"INTANGIBLE ASSETS" means, the Company's assets as are treated as
intangible pursuant to GAAP, including, without limitation: (a) obligations
owing by officers, directors, shareholders, employees, subsidiaries,
Affiliates or any Person in which any such officer, director, shareholder,
employee, subsidiary, or Affiliate owns any interest and (b) any asset which
is intangible or lacks intrinsic or marketable value or collectibility,
including, without limitation, goodwill, noncompetition agreements, patents,
copyrights, trademarks, franchises, organization or research and development
costs, which in the case of the Company, shall be determined on a
consolidated basis, without duplication.
"INTEREST EXPENSE" means, for any period, all interest charges paid or
accrued by the Company on a consolidated basis, with duplication, in
accordance with GAAP during such period.
"INVENTORY" means all goods, now owned or hereafter acquired by the
Company, wherever located, that are held for sale or lease or are to be
furnished under any contract of service (including, but not limited to raw
materials, work in process, finished goods and materials used or consumed in
the manufacture or production thereof, goods in which the Company has an
interest in mass or a joint or other interest or rights of any kind, and
goods which have been returned to or repossessed or stopped in transit by the
Company).
"NET PROFIT" means, for any period, the Company's net income after tax
for such period determined on a consolidated basis, without duplication, and
in accordance with GAAP.
"OBLIGATIONS" means all indebtedness, obligations and liabilities of the
Company to Fidelity arising under the Transaction Documents, and all other
indebtedness, obligations and liabilities of the Company to Fidelity, whether
presently existing or hereafter arising, direct or indirect, primary or
secondary, joint or several, fixed or contingent, and whether originally
payable to Fidelity or to a third party and subsequently acquired by Fidelity.
"PATENT COLLATERAL ASSIGNMENTS" means the separate Patent Collateral
Assignments, each dated as of the date hereof, made by the Company for the
benefit of Fidelity, as amended, modified or otherwise supplemented from time
to time.
"PERSON" means any individual, corporation, joint venture, partnership,
trust, unincorporated organization or governmental entity or agency.
"PRIME RATE" means the rate per annum published from time to time by THE
WALL STREET JOURNAL as the base rate for corporate loans at large commercial
banks (or, if more than one such rate is published, the higher or highest of
the rates so published). If such rate is no longer published by THE WALL
STREET JOURNAL, then Fidelity shall, in its sole discretion substitute the
base or prime rate for corporate loans at a large commercial bank for the
base rate published in THE WALL STREET JOURNAL. Such rate may not necessarily
be the lowest or best rate actually charged to any customer of such
commercial bank.
"REMITTANCE ADDRESS" means such address as Fidelity shall direct the
Company from time to time in writing in accordance with the terms hereof.
"SHAREHOLDERS EQUITY" means, as of any date, the sum of (a) the
shareholders' equity of the Company as of such date determined in accordance
with GAAP and (b) the then outstanding principal balance of any Debt of the
Company subordinated to the Obligations pursuant to a subordination agreement
acceptable to Fidelity between Fidelity and the Person to whom such Debt is
owed, when, in the case of the Company, shall be determined on a consolidated
basis, without duplication.
"TANGIBLE NET WORTH" means, as of any date, the amount obtained by
subtracting the Company's Intangible Assets as of such date from the
Company's Shareholders' Equity as of such date. In the case of the Company,
"Tangible Net Worth" shall be determined on a consolidated basis, without
duplication.
"TANGIBLE NET WORTH REQUIREMENT" means, (a) with respect to any date on
or after the date hereof, but on or prior to December 31, 1998, negative
$1,300,000, (b) with respect to any date on or after January 1, 1999, but on
or prior to September 30, 1999, negative $1,900,000, (c) with respect to any
date on or after October 1, 1999 but on or prior to March 31, 2000, negative
$2,300,000, and (d) for any date on or after April 1, 2000, the Tangible Net
Worth Requirement as of the last day of the preceding calendar month plus
$20,000.
"TERM" has the meaning given to it in Section 11.4.
"TERM ADVANCE" has the meaning given to it in Section 2.6.
"TERMINATION EVENT" means (a) the occurrence with respect to any ERISA
Plan of (i) a reportable event described in Sections 4043(b)(5) of ERISA or
(ii) any other reportable event described in Section 4043(b) of ERISA other
than a reportable event not subject to the provision for 30-day notice to the
Pension Benefit Guaranty Corporation pursuant to a waiver by such corporation
under Section 4043(a) of ERISA or (b) the withdrawal of the Company or any
Affiliate of the Company from any ERISA Plan during a plan year in which it
was a "substantial employer" as defined in Section 4001(a)(2) of ERISA, or
(c) any event or condition which might constitute grounds under Section 4042
of ERISA for the termination of, or the appointment of a trustee to
administer, any ERISA Plan.
"TRADEMARK SECURITY AGREEMENTS" means the separate Trademark Security
Agreements, each dated as of the date hereof, between the Company and
Fidelity, as amended, modified or otherwise supplemented from time to time.
"TRANSACTION DOCUMENTS" means this Agreement, the Patent Collateral
Assignments, the Trademark Security Agreements and all other documents and
instruments executed and delivered in connection herewith or therewith.
"UCC" means the Uniform Commercial Code as in effect in the applicable
jurisdiction.
"WORKING CAPITAL" means, as of any date, the excess of Current Assets
over Current Liabilities as of such date.
"WORKING CAPITAL REQUIREMENT" means (a) negative $5,300,000 until March
31, 2000 and (b) for any date on or after April 1, 2000, the Working Capital
Requirement as of the last day of the preceding calendar month plus $20,000.
1.2 Terms defined in the UCC and used but not defined herein shall
have the meanings ascribed to them in the UCC.
1.3 References herein to a particular agreement, instrument or
document also shall be deemed to refer to and include all renewals,
extensions and modifications of such agreement, instrument or document. All
addenda, exhibits and schedules attached to this Agreement are a part hereof
for all purposes. Words in the singular form shall be construed to include
the plural and vice versa, unless the context otherwise requires.
1.4 All interest accruing hereunder shall be calculated on the basis
of actual days elapsed (including the first but excluding the last day) plus
three business days and a year of 360 days. Unless otherwise expressly
provided herein or unless Fidelity otherwise consents, all financial
statements and reports furnished to Fidelity hereunder shall be prepared, and
all financial computations and determinations pursuant hereto shall be made,
in accordance with GAAP. All payments received by Fidelity after its
internally established time for closing business on any business day shall be
applied as of the next succeeding business day. Any payment which is due on a
day which is not a business day shall instead be deemed to be due on the next
succeeding business day, and interest thereon shall accrue and be payable at
the then applicable rate during the time of such extension. Fidelity's
records in
respect of loans advanced, accrued interest, payments received and applied
and other matters in respect of calculation of the amount of the Obligations
shall be deemed conclusive absent demonstration of error. All statements of
account rendered by Fidelity to the Company relating to principal, accrued
interest or costs owing by the Company under this Agreement shall be presumed
to be correct and accurate unless, within 30 days after receipt thereof, the
Company shall notify Fidelity in writing of any claimed error therein.
SECTION 2. ADVANCES.
2.1 Subject to the terms of this Agreement, including, without
limitation, Section 3, Fidelity shall make advances to the Company (each an
"Advance and collectively the "Advances") from time to time during the Term;
provided, however, that the aggregate principal amount of Advances
outstanding at any time to the Company shall not exceed the Borrowing Base
determined by Fidelity from time to time; and provided, further, however,
that the aggregate principal amount of Advances outstanding at any time to
the Company shall not exceed the Facility Limit. Each Advance must be in a
minimum amount of $5,000 or, if less, the unadvanced portion of the Borrowing
Base. The Company hereby agrees to repay to Fidelity all Advances made to the
Company hereunder, together with interest thereon, in the manner provided
herein. The principal owing hereunder in respect of the Advances at any given
time shall equal the aggregate amount of Advances made hereunder minus all
principal payments thereon received by Fidelity hereunder. Subject to the
terms and conditions hereof, the Company may borrow, repay and reborrow under
this Agreement.
2.2 Each request by the Company to Fidelity for an Advance hereunder
must be in writing or promptly confirmed in writing. Each such written
request or confirmation shall be accompanied by a "Borrowing Base
Certificate" in the form attached hereto as Exhibit "A," together with such
supporting information as Fidelity shall request, signed by an authorized
representative of the Company.
2.3 Promptly after receiving each Borrowing Base Certificate,
Fidelity shall, based upon such Borrowing Base Certificate and such other
information available to Fidelity, redetermine the Borrowing Base, which
redetermination shall take effect immediately and remain in effect until the
next such redetermination. If all conditions precedent to any Advance
requested have been met, Fidelity will on the date requested make such
Advance available to the Company by wire transfer to the account designated
in writing by the Company. In the event Fidelity does not receive an
appropriately completed Borrowing Base Certificate, Fidelity shall have no
obligation to redetermine any Borrowing Base or make any additional Advances
hereunder.
2.4 If the aggregate unpaid principal balance of the Advances to the
Company exceeds the Borrowing Base at any time, the Company shall, upon
receipt of notice thereof from Fidelity, immediately repay the principal of
the Advances in an amount at least equal to such excess. Any principal repaid
pursuant to this Section 2.4 shall be in addition to, and not in lieu of, all
payments otherwise required to be paid under the Transaction Documents.
2.5 The aggregate unpaid principal balance of the Advances plus all
accrued but unpaid interest thereon shall be payable by the Company to
Fidelity on demand, or if no demand is made, on the last day of the Term.
2.6 Subject to the terms and conditions hereof, including, without
limitation, Section 3, Fidelity agrees to make a single advance (the "Term
Advance") to the Company on the date of the first Advance hereunder in the
amount of $250,000. The Company hereby agrees to repay to Fidelity the Term
Advance, together with interest thereon, in the manner provided herein. The
principal owing hereunder in respect of the Term Advance at any given time
shall equal the initial amount of the Term Advance made hereunder minus all
principal payments thereon received by Fidelity hereunder. Amounts repaid in
respect of the Term Advance may not be reborrowed hereunder.
2.7 The request by the Company to Fidelity for the Term Advance must
be in writing. If all conditions precedent to the Term Advance have been
met, Fidelity will, on the date requested, make the Term Advance available to
the Company in immediately available funds by wire transfer to the account
designated in writing by the Company.
2.8 The aggregate principal balance of the Term Advance plus all
accrued but unpaid interest thereon shall be due and payable by the Company
to Fidelity on demand, or if no demand is made, as follows: the principal
balance of the Term Advance shall be repaid in 35 equal monthly installments
of $6,944.44, due and payable on the last day of each calendar month,
commencing on November 30, 1998, and a final installment of the remaining
principal balance of the Term Advance, due and payable on October 31, 2001;
provided, however, that the remaining unpaid principal balance of the Term
Advance and all accrued and unpaid interest thereon shall be due and payable
on the earlier of (a) the payment of the remaining unpaid principal balance
of the Advances and (b) the last day of the Term. The Term Advance may be
prepaid in whole or part prior to maturity without penalty or premium. Any
prepayment shall be applied to principal installments owed in respect of the
Term Advance in reverse order of due dates.
2.9 The Eligible Machinery and Equipment shall, at all times, have an
appraised forced liquidation value of not less than 185% of the outstanding
principal balance of the Term Advance. Fidelity may, from time to time, have
the Eligible Machinery and Equipment appraised by an appraiser selected by
Fidelity, and the Company shall pay the costs of any such appraisal. If any
such appraisal indicates that the forced liquidation value of the Eligible
Machinery and Equipment is less than 185% of the outstanding principal
balance of the Term Advance, the Company shall, at Fidelity's option, either
(a) grant a security interest to Fidelity in additional collateral
satisfactory to Fidelity having a force liquidation value, which together
with the forced liquidation value of the Eligible Machinery and Equipment,
equals or exceeds 185% of the outstanding principal balance of the Term
Advance or (b) immediately pay down the outstanding principal balance of the
Term Advance, plus all accrued interest on the amount prepaid, to an amount
equal to 185% of the forced liquidation value of the Eligible Machinery and
Equipment.
2.10 The aggregate unpaid principal balance of all Advances and the
Term Advance shall bear interest at the Contract Rate in effect from time to
time. Except as provided in Section 2.5 and Section 2.8, all accrued but
unpaid interest thereon shall be due and payable by the Company to Fidelity
on the last day of each calendar month.
2.11 The Company shall pay to Fidelity (a) an initial facility fee in
the amount of $85,000, payable in twelve monthly installments of $7,083.33
due and payable on the date of the first Advance hereunder and on the first
day of the next eleven successive calendar months, and (b) thereafter, an
annual facility fee in the amount of 1.00% of the Facility Limit, payable on
each anniversary of the date hereof during the Term. The Company hereby
authorizes Fidelity, at its sole discretion, to deduct any facility fee from
any Advance or the Term Advance hereunder.
2.12 Subject to the limitations set forth in Section 2.17, beginning
with November, 1998, as consideration for Fidelity's commitment to make
Advances hereunder the Company shall pay to Fidelity a minimum usage fee (in
this section called the "Minimum Usage Fee") for each calendar month (or
fraction thereof, on a prorated basis) during the Term in an amount equal to
the difference (if positive) between (a) the aggregate income Fidelity would
earn during such calendar month (or fraction thereof, on a prorated basis)
pursuant to Section 2.10 (excluding any income earned on any Term Advance) if
the aggregate principal amount of all Advances outstanding and owing by the
Company is $1,000,000 MINUS (b) the aggregate income earned by Fidelity
during such calendar month (or fraction thereof, on a prorated basis)
pursuant to Section 2.10 (excluding any income earned on any Term Advance) .
The Minimum Usage Fee for each calendar month shall be due and payable on the
first day of the next calendar month.
2.13 In addition to, and not in lieu of, any termination fee required
by Section 11.4, the Company shall pay to Fidelity a liquidation fee (in this
section called the "Liquidation Fee") in the amount of 5.00% of the face
amount of each Eligible Account included in the Borrowing Base that is
outstanding at any time during the Liquidation Period (as defined below). The
Liquidation Fee shall be payable on the earlier to occur of (i) the date on
which Fidelity collects the applicable Eligible Account and (ii) the
ninetieth day after the invoice date of the applicable Eligible Account. For
purposes of this section, the term "Liquidation Period" means a period
beginning on the earliest of (i) the date of commencement against or by the
Company of any voluntary or involuntary case under the federal Bankruptcy
Code, (ii) the date of any general assignment by the Company for the benefit
of its creditors; (iii) the date of any appointment or taking possession by a
receiver, liquidator, assignee, custodian or similar official of all or a
substantial part of the Company's assets, or (iv) the date of the cessation
of business of the Company (other than in connection with the sale of
substantially all of the assets of the Company, provided that Fidelity
consented in writing to such sale prior thereto), and ending on the date on
which Fidelity has actually received all fees, costs, expenses and other
amounts owing to it hereunder.
2.14 Contemporaneously with the execution and delivery hereof, the
Company shall pay to Fidelity a fee of $24,000 plus out-of-pocket expenses to
cover the charges of Fidelity's counsel for the negotiation, preparation,
execution and delivery of the Transaction Documents. In addition, the Company
shall pay or reimburse Fidelity upon demand for (a) all other costs and
expenses incurred by Fidelity in connection with its due diligence review of
the Company and the closing of the transactions contemplated hereby, and (b)
all reasonable attorney's fees, court costs and other expenses incurred by
Fidelity (whether or not litigation is commenced or judgment issued, and if
litigation is commenced whether at trial or any appellate level) in
connection with the enforcement by Fidelity of this Agreement or any other
Transaction Document, the protection or enforcement of Fidelity's interest in
the Collateral, the collection by Fidelity of the Collateral, or the
representation of Fidelity in connection with any bankruptcy case or
insolvency proceeding involving the Company, the Collateral, or any Account
Debtor, including, without limitation, any representation involving relief
from a stay motion, a cash collateral dispute, an assumption or rejection
motion or a dispute concerning any proposed disclosure statement and plan
proposed in any such proceeding. The Company has heretofore paid to Fidelity
a "good faith" deposit of $15,000. Upon the closing of the transaction
contemplated hereby, such "good faith" deposit shall be applied to the
payment of the Company's obligations hereunder.
2.15 Fidelity shall be entitled to collect upon demand its normal and
customary charges for the following routine services provided or obtained in
the course of performing its functions with respect to the Collateral:
appraisals, lock box charges, credit reports, wire transfers, overnight mail
delivery, and UCC, judgment, litigation and tax lien searches and filings.
2.16 All interest, fees and other amounts due to Fidelity pursuant to
this Section 2 shall be payable on demand, and may, in Fidelity's sole
discretion, be deducted from any Advance or Term Advance or paid from the
Cash Collateral.
2.17 As provided in Section 11.11, it is the intention and agreement
of the Company and Fidelity that all matters or issues relating to usury or
the maximum charges allowable by law for the use, detention or forbearance
of money be governed by the laws of the State of Texas. The parties hereto
intend to contract in strict compliance with applicable usury law from time
to time in effect. In furtherance thereof, the parties hereto stipulate and
agree that none of the terms and provisions contained in this Agreement or
any other Transaction Document or Guarantor Document shall ever be construed
to create a contract to pay, for the use, forbearance or detention of money,
interest in excess of the maximum amount of interest permitted to be charged
by applicable law from time to time in effect. None of the Company, any
present or future guarantor or any other Person hereafter becoming liable for
the payment of the Obligations, shall ever be liable for unearned interest
thereon or shall ever be required to pay interest thereon in excess of the
maximum amount that may be lawfully charged under applicable law from time to
time in effect, and the provisions of this paragraph shall control over all
other provisions of the Transaction Documents and Guarantor Documents which
may be in conflict therewith. If any indebtedness or obligation owed by the
Company under any Transaction Document is prepaid or accelerated and as a
result any amounts held to constitute interest are determined to be in excess
of the legal maximum, or Fidelity shall otherwise collect moneys which are
determined to constitute interest which would otherwise increase the interest
on all or any part of such obligations to an amounts in excess of that
permitted to be charged by applicable law then in effect, then all such sums
determined to constitute interest in excess of such legal limit shall,
without penalty, be promptly applied to reduce the then outstanding principal
of the related indebtedness or obligations or, at Fidelity's option returned
to the Company or the other payor thereof upon such determination. In
determining whether or not any amount paid or payable, under any
circumstance, exceeds the maximum amount permitted under applicable law,
Fidelity and the Company shall to the greatest extent permitted under
applicable law, characterize any non-principal payment as an expense, fee or
premium rather than as interest, and amortize, prorate, allocate and spread
the total amount of interest throughout the entire contemplated term of this
Agreement in accordance with the amounts outstanding from time to time
hereunder and the Maximum Rate from time to time in effect under applicable
law in order to lawfully charge the maximum amount of interest permitted
under applicable law. If at any time the rate at which interest is payable
hereunder exceeds the Maximum Rate, the amount outstanding hereunder shall
bear interest at the Maximum Rate only, but shall continue to bear interest
at the Maximum Rate until such time as the total amount of interest accrued
hereunder equals (but does not exceed) the total amount of interest which
would have accrued hereunder had there been no Maximum Rate applicable
hereto. In the event applicable law provides for an interest ceiling under
Chapter 1D of the Texas Credit Title, that ceiling shall be the indicated
(weekly) ceiling and shall be used when appropriate in determining the
maximum rate permitted by applicable law. As used in this paragraph, (i) the
term "applicable law" means the laws of the State of Texas or the laws of the
United States of America, whichever laws allow the greater interest, as such
laws now exist or may be changed or amended or come into effect in the
future, and (ii) the term "MAXIMUM RATE" means, at the time of determination,
the maximum rate of interest which, under applicable law, may then be charged
hereunder. The parties agree that this Agreement shall not be subject to
Chapter 346 of the Texas Finance Code.
SECTION 3. CONDITIONS PRECEDENT TO ADVANCES.
3.1 Fidelity shall not be obligated to make any Advance or Term
Advance hereunder (including the first) until it shall have received the
following documents, duly executed in form and substance satisfactory to
Fidelity and its counsel:
(a) general continuing guarantees of the Obligations executed by Waste
Recovery-Illinois, Waste Recovery-Illinois, L.L.C. and Domino
Salvage, Tire Lending, Inc., respectively;
(b) certificates executed by the President and the Secretary of the
Company and each guarantor of the Obligations certifying (i) the
names and signatures of the officers of the Company or guarantor,
as the case may be, authorized to execute Transaction Documents,
(ii) the resolutions duly adopted by the Board of Directors of the
Company or guarantor, as the case may be, authorizing the execution
of the Transaction Documents to which the Company or guarantor is a
party, and (iii) correctness and completeness of the copy of the
bylaws of the Company or guarantor, as the case may be, attached
thereto;
(c) a certificate executed by the President and the Chief Financial
Officer/Treasurer of the Company certifying the satisfaction of the
conditions set forth in Section 3.2;
(d) certificates regarding the due formation, valid existence and good
standing of the Company and each corporate guarantor in the state
of its organization issued by the appropriate governmental
authorities in such jurisdiction;
(e) releases executed by Chase Bank releasing all liens and security
interests of Chase Bank in the Collateral;
(f) a favorable opinion of counsel for the Company and each guarantor
of the Obligations covering such matters as Fidelity may reasonably
request;
(g) endorsements naming Fidelity as an additional insured or loss
payee, as appropriate, on all liability insurance and all property
insurance policies of the Company;
(h) an appraisal of the Company's Eligible Machinery and Equipment
performed by an appraiser selected by Fidelity in its sole and
absolute discretion showing that the forced liquidation value of
such Eligible Machinery and Equipment is at least $461,575;
(i) the Patent Collateral Assignment and the Trademark Security
Agreement, duly executed by the Company;
(j) a subordination agreement with each of the U.S. Small Business
Administration and The Bank of New York (as trustee for the
Development Authority of Xxxxxx County Georgia), respectively,
pursuant to which each subordinates in favor of Fidelity any liens
or security interests that it may have now or hereafter in the
Collateral, to the satisfaction of Fidelity, to Fidelity's security
interest therein;
(k) a letter from NationsBank, N.A. stating that the financing
statements filed in its favor with the Texas Secretary of State
covering Waste Recovery Services, Inc. do not cover the Collateral;
(l) tax lien releases from the City of Atlanta, the State of Georgia,
and Multnomah County, Oregon; and
(m) evidence that financing statement no. 97-007725 filed by Associates
Commercial Corporation with the Texas Secretary of State has been
amended to reflect that it does not cover any of the Collateral.
3.2 Fidelity shall not be obligated to make any Advance or Term
Advance hereunder (including the first), unless: (i) all representations and
warranties made by the Company in the Transaction Documents are true on and
as of the date of such Advance or Term Advance as if such representations and
warranties had been made as of the date of such Advance or Term Advance, (ii)
the Company has performed and complied with all agreements and conditions
required in the Transaction Documents to be performed or complied with by it
on or prior to the date of such Advance or Term Advance, (iii) no Event of
Default or any event or circumstance that, with the passage of time, the
giving of notice or both, would become an Event of Default shall have
occurred, (iv) such Advance or Term Advance shall not be prohibited by any
law or any regulation or any order of any court or governmental agency or
authority, (v) none of the Company or any guarantor shall have repudiated or
made any anticipatory breach of any of its obligations under any Transaction
Document, and (vi) Fidelity shall not have disapproved such Advance or Term
Advance in whole or in part.
3.3 Fidelity shall not be obligated to make the first Advance to the
Company hereunder, unless, at the time thereof, the Borrowing Base exceeds
the aggregate principal amount of the first Advance to the Company hereunder
(after taking into account the use of the proceeds of each such first Advance
and the Term Advance), by at least $300,000.
SECTION 4. THE COMPANY'S REPRESENTATIONS AND WARRANTIES. The Company
represents and warrants to Fidelity on the date hereof, and shall be deemed
to represent and warrant to Fidelity on each date on which an Advance or a
Term Advance is made to the Company hereunder, that:
4.1 The Company is a corporation duly organized, validly existing and
in good standing under the laws of the state of its incorporation, with all
requisite power and authority to execute, deliver and perform its obligations
under this Agreement and the other Transaction Documents to which it is a
party and to conduct its business as presently conducted. The Company is duly
qualified and authorized to do business as a foreign corporation and is in
good standing in all states in which such qualification and good standing are
necessary or desirable for the conduct by the Company of its business or the
performance by the Company of its obligations hereunder. The execution,
delivery and performance by the Company of this Agreement and the other
Transaction Documents to which it is a party do not and will not constitute
(a) a violation of any applicable law or the Company's articles or
certificate of incorporation or bylaws or (b) a material breach of any other
document, agreement or instrument to which the Company is a party or by which
the Company is bound. This Agreement and the other Transaction Documents to
which the Company is a party have been duly authorized, executed and
delivered by the Company, and are legal, valid and binding obligations of the
Company enforceable against the Company in accordance with their terms. No
consent of, approval by, registration or filing with or authorization from
any governmental authority or agency is required in connection with the
execution, delivery or performance by the Company of this Agreement or the
other Transaction Documents to which it is a party.
4.2 Except as described on Schedule 4.2 attached hereto, none of the
Collateral is subject to any lien, encumbrance, security interest or other
claim of any kind or nature, the Company has not transferred, sold, pledged
or given a security interest in any of its Accounts, Inventory, machinery or
equipment to anyone other than Fidelity, and there are no financing
statements on file in any public office governing any property of the Company
of any kind, real or personal, in which the Company is named in or has signed
as the debtor.
4.3 Except as described on Schedule 4.2 attached hereto, the Company
is the sole owner and holder of, and has good and marketable title to, all
Collateral purported to be owned by it. This Agreement creates a valid
security interest in the Collateral in favor of Fidelity, and, except as
described in Schedule 4.2 attached hereto, such security interest is a
perfected, first-priority security interest in the Collateral superior to the
rights of any other Persons therein.
4.4 The amount of each Eligible Account of the Company is due and
owing to the Company and represents an accurate statement of a bona fide
sale, delivery and acceptance of Inventory or performance of service by the
Company to or for an Account Debtor. The terms for payment of the Eligible
Accounts are 30 days from date of invoice and the payment of the Eligible
Accounts is not contingent upon the fulfillment by the Company of any further
performance of any nature whatsoever. There are no set-offs, allowances,
discounts, deductions, counterclaims against the Eligible Accounts or any
claims by Account Debtors, of any kind whatsoever, valid or invalid, that
have been or may be asserted as a basis for refusing to pay an Eligible
Account, in whole or in part, either at the time it is accepted by Fidelity
for inclusion in any Borrowing Base or prior to the date it is to be paid. To
the best of the Company's knowledge, each Account Debtor's business is
solvent. The Company has served or caused to be served any and all
preliminary notices required by law to perfect or enforce any mechanic's lien
or stop notice or bonded stop notice for the Eligible Accounts and the
information contained in those notices is true and correct to the best of the
Company's knowledge.
4.5 The addresses set forth in the perfection certificates delivered
by the Company to Fidelity in connection herewith are, and for at least the
last six months have been, the mailing addresses, the chief executive office,
the principal place of business, the offices where all of the books and
records concerning the Eligible Accounts are maintained and the location of
all Collateral of the Company. The Company does not transact business, nor
has it transacted business during the past five years, under any trade,
fictitious or assumed name other than those set forth under the Company's
signature hereon. During the past five years, the Company has not been a
party to a merger or consolidation and has not acquired all or substantially
all of the assets of any Person except as described on Schedule 4.5 attached
hereto.
4.6 Except as described on Schedule 4.6 attached hereto, the Company
has filed all tax reports and returns required to be filed by it and has paid
all federal, state and local taxes and governmental charges imposed upon the
Company.
4.7 The Company is in compliance with ERISA, and is not required to
contribute to any "multiemployer plan" as defined in Section 4001 of ERISA.
The Company has conducted its business in compliance with all applicable
laws, including but not limited to, applicable Environmental Laws, and
maintains and is in compliance with all licenses and permits required under
any such laws to conduct its business and perform its obligations hereunder.
The Company does not have any known material contingent liability under any
Environmental Law.
4.8 The application made by the Company to Fidelity in connection
with this Agreement and the statements made therein and in any materials
furnished in connection therewith are true and correct as of the date hereof.
All financial statements furnished by the Company to Fidelity in connection
with such application or hereunder have been prepared in accordance with GAAP
and fairly present the financial condition and results of operations of the
Company as of the dates and for the periods indicated therein.
4.9 There is no fact which the Company has not disclosed to Fidelity
in writing which could materially adversely affect the properties, business
or financial condition of the Company or any of the Collateral, or which it
is necessary to disclose in order to keep the foregoing representations and
warranties from being misleading.
SECTION 5. COVENANTS OF THE COMPANY. From the date hereof and until
the payment and performance in full of all of the Obligations, the Company
covenants with Fidelity that:
5.1 The Company shall preserve and maintain its corporate existence,
good standing and authority to transact business in all jurisdictions where
necessary for the proper conduct of its business, and shall maintain all of
its properties, rights, privileges and franchises necessary or desirable in
the normal conduct of its business.
5.2 The Company shall permit Fidelity and its representatives,
including any appraisers, auditors and accountants selected by Fidelity, to
inspect any of the Collateral at any time during normal business hours. In
addition, Fidelity shall have the
right, from time to time, to audit the Company's books and records during
normal business hours. The Company shall pay all costs associated with any
such audits at the rate of $700 per day per auditor plus reasonable
out-of-pocket expenses.
5.3 The Company shall maintain its books and records in accordance
with GAAP. The Company shall furnish Fidelity, upon request, such information
and statements as Fidelity shall request from time to time regarding the
Company's business affairs, financial condition and results of its
operations. Without limiting the generality of the foregoing, the Company
shall provide Fidelity, (i) on or prior to the 45th day after each month,
unaudited financial statements with respect to such month, (ii) on or prior
to the 60th day after each month, unaudited consolidated and consolidating
financial statements with respect to such month, and (iii), within 90 days
after the end of each of the Company's fiscal years, audited annual
consolidated and consolidating financial statements, together with such
certificates relating to the foregoing as Fidelity may request including,
without limitation, a monthly certificate from the president and chief
financial officer of the Company stating whether any Events of Default have
occurred and stating in detail the nature thereof. The Company shall provide
Fidelity a Borrowing Base Certificate, appropriately completed and with all
attachments, at any time that Fidelity shall request and on or before the
last day of any calendar week in which the Company does not request an
Advance. In addition, the Company shall furnish to Fidelity upon request a
current listing of all open and unpaid accounts payable and accounts
receivable, names, addresses and contact persons for Account Debtors, and
such other items of information that Fidelity may deem necessary or
appropriate from time to time. The Company immediately shall notify Fidelity
in writing upon becoming aware of the existence of any condition or
circumstance that constitutes an Event of Default or that would, with the
giving of notice, the passage of time or both, constitute an Event of
Default. Any such written notice shall specify the nature of such condition
or circumstance, the period of the existence thereof and the action that the
Company proposes to take with respect thereto. The Company, shall, within
two business days after the filing or delivery thereof, deliver to Fidelity a
copy of any report, statement or other filing made with the Securities
Exchange Commission or provided to its stockholders generally.
5.4 The Company promptly shall notify Fidelity of any attachment or
any other legal process levied against the Company and any action, suit,
proceeding or other similar claim initiated against the Company.
5.5 The Company shall keep and maintain adequate insurance by
insurers acceptable to Fidelity with respect to its business and all
Collateral. Such insurance shall cover loss, damages and liability of amounts
not less than reasonably requested by Fidelity and shall include, at a
minimum, business interruption insurance, insurance for workers compensation,
general premises liability, fire, casualty, theft and all risk. The Company
shall cause Fidelity to be an additional insured and loss payee under all
policies of insurance covering any of the Collateral, to the extent of
Fidelity's interest. The Company shall deliver copies of each insurance
policy to Fidelity upon request.
5.6 The Company shall file all tax reports and returns required to be
filed by it in the manner and at the times required by applicable law, and
shall pay all federal, state and local taxes and charges imposed upon the
Company when due (subject to any valid extension).
5.7 The Company shall comply with ERISA and shall not become required
to contribute to any "multiemployee plan" as defined in Section 4001 of
ERISA. The Company shall conduct its business in compliance with all
applicable laws, and shall maintain and comply with all licenses and permits
required under any such laws to conduct its business and perform its
obligations hereunder. Without limiting the generality of the foregoing, the
Company shall comply with all Environmental Laws now or hereafter applicable
to the Company and shall obtain, at or prior to the time required by
applicable Environmental Laws, all environmental, health and safety permits,
licenses and other authorizations necessary for its operations. The Company
promptly shall furnish to Fidelity all written notices of violation,
complaints, penalty assessments, suits or other proceedings received by the
Company with respect to any alleged violation of or non-compliance with any
Environmental Laws.
5.8 The Company shall not incur Capital Expenditures in excess of
$500,000 in the aggregate during any fiscal year, excluding any such Capital
Expenditures funded with the proceeds of any casualty or loss insurance.
5.9 The Company shall maintain a Tangible Net Worth of not less than
the Tangible Net Worth Requirement at all times.
5.10 The Company shall maintain a Debt Service Coverage Ratio of not
less than the DCR Requirement at all times on and after March 31, 1999.
5.11 The Company's Net Profit for each fiscal year of the Company
shall equal or exceed negative $1,000,000 for calendar year 1999 and $240,000
for each calendar year thereafter. The Company's Net Profit shall not be
negative for any four or more consecutive calendar months beginning with
March 1999.
5.12 The Company shall maintain Working Capital of not less than the
Working Capital Requirement at all times.
5.13 The Company shall not grant, create or allow to exist any
security interest, lien or other encumbrance on any of the Collateral other
than (a) the lien and security interest granted to Fidelity herein, (b) the
security interests, liens or other encumbrances described on Schedule 4.2
attached hereto and any liens and security interests granted to holders of
Debt refinancing any Debt secured by such security interests, liens or other
encumbrances to the extent permitted by Section 5.13(c), (c) purchase money
liens or security interests granted to secure Debt not exceeding $500,000 in
the aggregate per fiscal year of the Company, including, without limitation,
Debt incurred to finance Capital Expenditures, and (d) liens and security
interests securing Debt permitted under Section 5.13(c), and the Company
shall not execute any financing statement in favor of any Person other than
Fidelity, the Persons described on Schedule 4.2 attached hereto and any
Person to whom a purchase money lien or security interest or other lien or
security interest permitted above has been granted. The Company shall not
change its mailing address, chief executive office, principal place of
business or place where such records are maintained, open any new place of
business, close any existing place of business or change the location of any
of the Collateral or transact business under any trade, fictitious or assumed
name other than those set forth under the Company's signature hereon without
providing at least 30 days' prior written notice thereof to Fidelity.
5.14 The Company shall not accept any returns or grant any allowance
or credit (other than those returns, allowances and credits accepted or
granted in the ordinary course of the Company's business) to any Account
Debtor without notice to and the prior written approval of Fidelity. The
Company shall provide to Fidelity for each Account Debtor on Eligible
Accounts a weekly report, in form and substance satisfactory to Fidelity,
itemizing all such returns and allowances made during the previous week with
respect to such Eligible Accounts.
5.15 The Company shall not incur, directly, or indirectly, any Debt
for borrowed money or otherwise under any promissory note, bond, indenture or
similar instrument, or in connection with the obligations of any Person
(whether by guaranty, suretyship, purchase or repurchase agreement or
agreement to make investments or otherwise), other than (a) Debt incurred in
favor of Fidelity, (b) Debt secured by purchase money liens or security
interests permitted by Section 5.13, (c) Debt incurred to refinance any other
Debt then existing and permitted hereunder to the extent that such Debt does
not exceed the amount of Debt refinanced and such Debt is secured only by the
properties and assets that secured the Debt refinanced, (d) Debt incurred in
the normal and ordinary course of the Company's business, or (e) third-party
"mezzanine" Debt incurred by the Company on or before December 31, 1999 in an
aggregate principal amount not to exceed $13,500,000 which Debt is
subordinated to the Obligations, in form and substance satisfactory to
Fidelity.
5.16 The Company shall not use any of the funds paid to the Company
hereunder directly or indirectly for personal, family, household or
agricultural purposes.
5.17 Except in connection with any transaction permitted under Section
5.15, the Company shall not directly or indirectly become liable in
connection with the Debt of any Person, whether by guarantee, surety,
endorsement (other than endorsement of negotiable instruments for collection
in the ordinary course of business), agreement to purchase or repurchase,
agreement to make investments, agreement to provide funds or maintain working
capital, or any agreement to assure a creditor against loss, other than in
favor of Fidelity.
5.18 The Company shall not discontinue, or make any material change
in, its business as currently established, or enter any new or different line
of business not directly related to the Company's existing line of business.
5.19 The Company shall not declare, pay or issue any dividends or
other distributions in respect of its capital stock or distribute, reserve,
secure, or otherwise make or commit distributions on account of its capital
stock, or make any payment on account of the purchase, redemption or other
acquisition or retirement of any shares of its capital stock (each, a
"Distribution"); provided, however, that so long as immediately prior thereto
and after giving effect thereto, no Event of Default or any event or
circumstance that, with the giving of notice, the passage of time or both,
would constitute an Event of Default, has occurred.
5.20 The Company shall not make any loans or advances to or for the
benefit of any officer, director, shareholder or Affiliate of the Company;
provided, however, that the Company may make advances for routine expense
allowances to its officers and directors in the ordinary course of business.
The Company shall not make any payment on any obligation owing to any
officer, director, shareholder or Affiliate of the Company.
5.21 Without the prior written consent of Fidelity, the Company shall
not purchase or otherwise acquire assets from any Person outside the ordinary
course of business of the Company.
5.22 Without the prior written consent of Fidelity, the Company shall
not invest in or otherwise purchase or acquire the securities of any Person.
5.23 Without the prior written consent of Fidelity, the Company shall
not dispose of any of its assets other than the sale of Inventory in the
ordinary course of business, and the Company shall not dissolve or liquidate
or become a party to any merger or consolidation with any Person.
5.24 The Company (a) shall keep and maintain its furniture, fixtures
machinery and equipment in good operating condition and repair (normal wear
and tear excepted), (b) shall make all necessary repairs thereto so that the
value and operating efficiency thereof shall at all times be maintained and
preserved, and (c) shall not remove any furniture, fixtures machinery or
equipment that is now or hereafter located on the Company's Baytown Facility
(including, without limitation, the furniture, fixtures machinery and
equipment listed or described on Schedule 6A attached hereto) from the
Company's Baytown Facility, except in the ordinary course of the Company's
business, without the prior consent of Fidelity. The Company shall notify
Fidelity immediately in writing of any material loss or damage to any item of
its furniture, fixtures, machinery and equipment.
5.25 If the Company now owns or hereafter acquires any vehicles,
aircraft, watercraft or other machinery and equipment for which a certificate
of title has been issued or applied for, the Company immediately shall
deliver to Fidelity, properly endorsed, each certificate of title or
application for title or other evidence of ownership for each such item of
machinery and equipment. The Company shall take all actions necessary to have
Fidelity's security interest properly recorded on each such certificate of
title and shall take all other actions necessary to perfect Fidelity's
security interest in all such assets now or hereafter acquired by the Company.
SECTION 6. COLLATERAL. In order to secure the payment and
performance of all Obligations, the Company hereby grants to Fidelity a
security interest in and lien upon all of the Company's right, title and
interest in and to (a) all Accounts, contract rights and general intangibles,
receivables and claims, whether now or hereafter arising, all guaranties and
security therefor and all of the Company's right title and interest in the
goods purchased and represented thereby, if any, including all of the
Company's rights in and to returned goods and rights of stoppage in transit,
replevin and reclamation as unpaid vendor; (b) all Inventory, and all
accessions thereto and products thereof and documents therefor; (c) all
furniture, fixtures, equipment and machinery located at the Company's Baytown
Facility (including, without limitation, all furniture, fixtures, equipment
and machinery listed or described on Schedule 6A attached hereto) whether now
or hereafter existing, and whether now or hereafter removed from the
Company's Baytown Facility, and all parts thereof, accessions thereto, and
replacements therefor and all documents and general intangibles covering or
relating thereto; (d) all trademarks, rights and interests protectable as
trademarks, trade names, corporate names, company names, business names,
fictitious business names, trade styles, service marks, logos and any other
designs or sources of business identifies, indicia of origin or similar
devices, all registrations with respect thereto, including, without
limitation, those listed or described on Schedule 6B attached hereto, all
applications with respect to the foregoing, and all extensions and renewals
with respect to any of the foregoing, together with all of the goodwill
associated therewith, in each case whether now or hereafter existing, and all
rights and interest associated with the foregoing including any licenses,
license rights and royalties and all rights by opposition or cancellation
proceedings or otherwise to xxx for past, present and future infringements of
such rights; (e) all patents and all applications with respect thereto, all
rights existing with respect to the foregoing, including any licenses,
license rights or royalties, any proceeds of infringement suits, and all
rights to such for past, present and future infringements, in each case,
whether now or hereafter existing; all rights corresponding thereto
throughout the world and all reissues, divisions, continuations, renewals,
extensions and continuations-in-part thereof; (f) all books and records
pertaining to the foregoing, including but not limited to computer programs,
data, certificates, records, circulation lists, subscriber lists, advertiser
lists, supplier lists, customer lists, customer and supplier contracts, sales
orders, and purchasing records; and (g) all proceeds of the foregoing
(collectively, the "Collateral"). The Company agrees to comply with all
appropriate laws in order and to take all actions necessary or desirable in
Fidelity's judgment to perfect Fidelity's security interest in and to the
Collateral, to execute any financing statement or additional documents as
Fidelity may request and to deliver to Fidelity a list of all locations of
its Inventory, equipment and machinery and landlord and or mortgagee lien
waivers with respect to each site where Inventory, equipment or machinery is
located and which is either leased by the Company or has been mortgaged by
the Company, upon request by Fidelity. The parties acknowledge that Waste
Recovery Illinois Partnership is a distinct legal entity separate and apart
from the Company and that none of its assets and properties constitute part
of the Collateral.
SECTION 7. COLLECTION. Each invoice representing an Account shall
state on its face that amounts payable thereunder are payable only at the
Remittance Address. Fidelity shall have the right at any time, either before
or after the occurrence of an Event of Default and without notice to the
Company, to notify any or all Account Debtors on the Collateral of the
assignment of the Collateral to Fidelity and to direct such Account Debtors
to make payment of all amounts due or to become due to the Company directly
to Fidelity, and to the extent permitted by law, to enforce collection of any
Collateral and to adjust, settle or compromise the amount or payment thereof.
So long as no Event of Default or event that, with the passage of time, the
giving of notice or both, would become an Event of Default has occurred and
is continuing, all collections of Collateral of the Company received by
Fidelity shall be
applied by Fidelity to the payment of the outstanding Advances of the
Company, whether or not then due, then to the principal amount of the Term
Advance, if any, to the Company then due, then to accrued and unpaid interest
on the Advances and Term Advance, if any to the Company then due, then to any
other charges or fees then due and allocable or attributable directly to the
Company, then to all other Obligations then due and any remaining funds shall
be delivered to the Company. Upon the occurrence of an Event of Default or an
event that, with the passage of time, the giving of notice or both, would
become an Event of Default, any such remaining funds may be applied to any of
the Obligations of the Company, whether or not then due, or held by Fidelity
as cash collateral ("Cash Collateral") until all Obligations have been paid
in full and Fidelity has no further obligation to advance funds to the
Company. All amounts and proceeds (including instruments and writings)
received by the Company in respect of the Collateral shall be received in
trust for the benefit of Fidelity hereunder, shall be segregated from other
funds of the Company and shall be immediately paid over to Fidelity in the
same form as received (with any necessary endorsement) to be applied in the
same manner as payments received directly by Fidelity.
SECTION 8. POWER OF ATTORNEY. The Company grants to Fidelity an
irrevocable power of attorney coupled with an interest authorizing and
permitting Fidelity, at its option, with or without notice to the Company, to
do any or all of the following: (a) endorse the name of the Company on any
checks or other evidences of payment whatsoever that may come into the
possession of Fidelity regarding Collateral, including checks received by
Fidelity pursuant to Section 7 hereof; (b) receive, open and forward any mail
addressed to the Company and put Fidelity's address on any statements mailed
to Account Debtors; (c) pay, settle, compromise, prosecute or defend any
action, claim, conditional waiver and release, or proceeding relating to
Collateral; (d) upon the occurrence of an Event of Default, notify, in the
name of the Company, the U.S. Post Office to change the address for delivery
of mail addressed to the Company to such address as Fidelity may designate
(provided that Fidelity shall turn over to the Company all such mail not
relating to Collateral); (e) execute and file on behalf of the Company any
financing statement, amendment thereto or continuation thereof (i) deemed
necessary or appropriate by Fidelity to protect Fidelity's interest in and to
the Collateral or (ii) required or permitted under any provision of this
Agreement; and (f) do all other things necessary and proper in order to carry
out this Agreement. The authority granted to Fidelity herein is irrevocable
until this Agreement is terminated and all amounts due to Fidelity hereunder
have been paid in full. The Company acknowledges that Fidelity may verify or
confirm the Eligible Accounts from time to time, by among other means,
contacting the related Account Debtors, and the Company consents to such
verification and confirmation.
SECTION 9. DEFAULT. An event of default ("Event of Default") shall
be deemed to have occurred hereunder, Fidelity shall have no further
obligation to make any further Advances or Term Advance and may immediately
exercise its rights and remedies with respect to the Collateral under this
Agreement, the UCC and applicable law, upon the happening of one or more of
the following:
(a) The Company shall fail to pay on demand or otherwise as and when
required or due any amount required to be paid or owed by the Company to
Fidelity, whether hereunder or otherwise.
(b) The Company shall breach any covenant or agreement made herein or
in any other Transaction Document (other than those covered by clause (a)
above) and the same shall not be cured to Fidelity's satisfaction within 15
days after the earlier of (i) the date on which Company first has knowledge
that such covenant or agreement has been breached or (ii) the date on which
Fidelity notifies the Company that such covenant or agreement has been
breached.
(c) Any warranty or representation made herein or in any other
Transaction Document shall be untrue in any material respect when made or any
report, certificate, schedule, financial statement, profit and loss statement
or other statement furnished by the Company, or by any other Person on behalf
of the Company, to Fidelity is not true and correct in all material respects
when furnished.
(d) There shall be commenced by or against the Company any voluntary
or involuntary case under the federal Bankruptcy Code, or the Company shall
make an assignment for the benefit of its creditors, or of a receiver or
custodian shall be appointed for the Company for a substantial portion of its
assets.
(e) The Company shall become insolvent in that its debts are greater
than the fair value of its assets, or the Company is generally not paying its
debts as they become due.
(f) Any involuntary lien, garnishment, attachment or the like in
excess of $25,000 shall be issued against or shall attach to the Collateral
and the same is not within 10 days (i) released or (ii) bonded or insured to
the satisfaction of Fidelity.
(g) An event or circumstance shall have occurred which Fidelity
believes has or may result in a material adverse change in the Company's
financial condition, business or operations or the value of the Collateral.
(h) The Company shall have a federal or state tax lien filed against
any of its properties, or shall fail to pay any federal or state tax when
due, or shall fail to file any federal or state tax form or report as and
when due (subject to any valid extension).
(i) Either (i) any "accumulated funding deficiency" (as defined in
Section 412(a) of the Internal Revenue Code of 1986, as amended) in excess of
$25,000 exists with respect to any ERISA Plan, or (ii) any Termination Event
occurs with respect to any ERISA Plan and the then current value of such
ERISA Plan's benefit liabilities exceeds the then current value of such ERISA
Plan's assets available for the payment of such benefit liabilities by more
than $25,000.
(j) The Company suffers the entry against it of a final judgment for
the payment of money in excess of $25,000, and either (i) such judgment is
not paid in full within 30 days after the entry of such judgment or (ii) such
judgement is not bonded or insured to the satisfaction of Fidelity.
(k) Fidelity shall believe that the prospect for payment or
performance of the Obligations has become impaired.
(l) Any guarantor of the Obligations shall repudiate his, her or its
obligations in respect of such guaranty.
(m) Xxx Xxxxxxxx or Xxxxxxx Xxxxxxx shall cease to be a member of the
Board of Directors of the Company, or more than one-half of the Board of
Directors of the Company shall be replaced, retire or resign during any
12-month period.
(n) An "Event of Default" shall have occurred under any of the
Transaction Documents.
(o) (i) An "event of default" shall have occurred under any
agreement, document or instrument evidencing Debt exceeding $50,000 of the
Company and such "event of default" is not waived by the holder of such Debt
or otherwise cured by the Company within the "cure period", if any, provided
for in such agreement, document or instrument for such "event of default", or
(ii) any Debt exceeding $50,000 of the Company is accelerated or called for
payment prior to the due date thereof.
Upon the occurrence of an Event of Default described in subsection (d) of
this section, all of the Obligations owing by the Company to Fidelity under
any of the Transaction Documents shall thereupon be immediately due and
payable, without demand, presentment, notice of demand or of dishonor and
nonpayment, or any other notice or declaration of any kind, all of which are
hereby expressly waived by the Company. During the continuation of any other
Event of Default, Fidelity, at any time and from time to time, may declare
any or all of the Obligations owing by the Company to Fidelity under any of
the Transaction Documents immediately due and payable, all without notice,
demand, presentment, notice of demand or of dishonor and nonpayment, or any
notice or declaration of any kind, all of which are hereby expressly waived
by the Company. After any such acceleration (whether automatic or due to
declaration by Fidelity), any obligation of Fidelity to make any further
Advances, Term Advance or loans of any kind under this Agreement or any other
agreement with the Company shall terminate.
The enumeration of Events of Default shall not impair the nature of the
Obligations as demand obligations, at all times payable upon demand pursuant
hereto. All Advances and the Term Advance hereunder are subject to approval
by Fidelity in its sole discretion, and may be declined in whole or in part,
without prior notice to the Company, whether or not an Event of Default may
then be in existence.
SECTION 10. REMEDIES AND APPLICATION OF PROCEEDS.
10.1 In addition to, and without limitation of, the foregoing
provisions of this Agreement, if an Event of Default shall have occurred and
be continuing, Fidelity may from time to time in its discretion, without
limitation and without notice except as expressly herein: (a) exercise in
respect of the Collateral, in addition to other rights and remedies provided
for herein, under the other Transaction Documents or otherwise available to
it, all the rights and remedies of a secured party on default under the UCC
(whether or not the UCC applies to the affected Collateral); (b) require the
Company to, and the Company hereby agrees that it will at its expense,
assemble all or part of the Collateral as directed by Fidelity and make it
available to Fidelity at a place to be designated by Fidelity that is
reasonably convenient to both parties; (c) reduce its claim to judgment or
foreclose or otherwise enforce, in whole or in part, the security interest
created hereby by any available judicial procedure; (d) dispose of, at its
office, on the premises or the Company or elsewhere, all or any part of the
Collateral, as a unit or in parcels, by public or private proceedings; (e)
buy the Collateral, or any part thereof, at any public sale, or at any
private sale if the Collateral is of a type customarily sold in a recognized
market or is of a type that is the subject to widely distributed standard
price quotations; (f) apply by appropriate judicial proceedings for
appointment of a receiver for the Collateral, or any part thereof, and the
Company hereby consents to any such appointment; and (g) at its discretion,
retain the Collateral in satisfaction of the Obligations whenever the
circumstances are such that Fidelity is entitled to do so under the UCC or
otherwise. The Company agrees that, to the extent notice of sale shall be
required by law, at least five
business days' notice to the Company of the time and place of any public sale
of the Collateral or the time after which any private sale of the Collateral
is to be made shall constitute reasonable notification. Fidelity shall not be
obligated to make any sale of Collateral regardless of whether any notice of
sale has been given. Fidelity may adjourn any public or private sale from
time to time by announcement at the time and place fixed therefor, and such
sale may, without further notice, be made at the time and place to which it
was so adjourned.
10.2 If any Event of Default shall have occurred and be continuing,
Fidelity may in its discretion apply any Cash Collateral, and any cash
proceeds received by Fidelity in respect of any sale of, collection from, or
other realization upon all or any part of the Collateral, to any or all of
the following in such order as Fidelity may elect: (a) the repayment of all
or any portion of the Obligations; (b) the repayment of reasonable costs and
expenses, including reasonable attorneys' fees and legal expenses, incurred
by Fidelity in connection with (i) the administration of this Agreement, (ii)
the custody, preservation, use or operation of, or the sale of, collection
from, or other realization upon, any Collateral, (iii) the exercise or
enforcement of any of the rights of Fidelity hereunder, or (iv) the failure
of the Company to perform or observe any of the provisions hereof; (c) the
payment or other satisfaction of any liens and other encumbrances upon any of
the Collateral; (d) the reimbursement of Fidelity for the amount of any
obligations of the Company paid or discharged by Fidelity, and of any
expenses of Fidelity payable by the Company hereunder or under the other
Transaction Documents; (e) by holding the same as Collateral; (f) the payment
of any other amounts required by applicable law (including, without
limitation, Part 5 of Article 9 of the UCC or any successor or similar
applicable statutory provision); and (g) by delivery to the Company or to
whomsoever shall be lawfully entitled to receive the same or as a court of
competent jurisdiction shall direct.
Section 11. MISCELLANEOUS.
11.1 In the event that the Company commits any act or omission that
prevents or unreasonably interferes with (a) Fidelity's exercise of the
rights and privileges arising under the power of attorney granted in Section
8 of this Agreement or (b) Fidelity's perfection of or levy upon the security
interest granted in the Collateral, including any seizure of any Collateral,
the Company acknowledges that such conduct will cause immediate, severe,
incalculable and irreparable harm and injury, and agrees that such conduct
shall constitute sufficient grounds to entitle Fidelity to an injunction,
writ of possession, or other applicable relief in equity, and to make such
application for such relief in any court of competent jurisdiction, without
any prior notice to the Company.
11.2 All rights, remedies and powers granted to Fidelity in this
Agreement, or in any other instrument or agreement given by the Company to
Fidelity or otherwise available to Fidelity in equity or at law, are
cumulative and may be exercised singularly or concurrently with such other
rights as Fidelity may have. These rights may be exercised from time to time
as to all or any part of the Collateral as Fidelity in its discretion may
determine. No waiver by Fidelity of its rights and remedies shall be
effective unless the waiver is in writing and signed by Fidelity. A waiver by
Fidelity of a right or remedy under this Agreement or any other Transaction
Document on one occasion shall not be deemed to be a waiver of such right or
remedy on any subsequent occasion. An Advance or Term Advance by Fidelity
during the continuation of an Event of Default shall not obligate Fidelity to
make any further Advances or Term Advances during the continuation of such
Event of Default.
11.3 Any notice or communication with respect to this Agreement or any
other Transaction Document shall be given in writing, sent by (i) personal
delivery, (ii) expedited delivery service with proof of delivery, (iii)
United States mail, postage prepaid, registered or certified mail, or (iv)
prepaid telegram, telex or telecopy, addressed to each party hereto at its
address set forth below its signature hereon or to such other address or to
the attention of such other Person as hereafter shall be designated in
writing by the applicable party sent in accordance herewith. Any such notice
or communication shall be deemed to have been given either at the time of
personal delivery or, in the case of delivery service or mail, as of the date
of first attempted delivery at the address and in the manner provided herein,
or in the case of telegram, telex or telecopy, upon receipt. The Company
hereby agrees that Fidelity may publicize the transaction contemplated by
this Agreement in newspapers, trade and similar publications including,
without limitation, the publication of a "tombstone".
11.4 (a) The term of this Agreement shall be for three years from
the date hereof (the original term and any extension thereof are herein
called the "Term") and from year to year thereafter unless either party
hereto gives notice to the other party hereto not more than 90 days or less
than 60 days prior to the end of the Term; provided, however, that Fidelity
may terminate this Agreement at any time effective immediately upon the
occurrence of an Event of Default. The Company acknowledges that, except as
provided in Section 11.4(b), it shall have no right to terminate this
Agreement prior to the end of the Term, that termination of this Agreement at
any time prior to the end of the Term would result in the loss by Fidelity of
benefits under this Agreement and that the damages incurred by Fidelity as a
result of such termination would be difficult and impractical to ascertain.
Therefore, except as provided in Section 11.4(b), in the event this Agreement
is terminated for any reason during the first year of the Term, the Company
shall pay to Fidelity an early termination fee in the amount of 5.00% of the
Facility Limit; if this Agreement is terminated for any reason during the
second year of the Term, the Company shall pay to Fidelity an early
termination fee in the amount of 2.00%
of the Facility Limit; and if this Agreement is terminated for any reason
during the remainder of the Term, the Company shall pay to Fidelity an early
termination fee in the amount of 1.00% of the Facility Limit; in each case,
to the maximum extent permitted by applicable law. Any termination of this
Agreement shall not affect Fidelity's security interest in the Collateral,
and this Agreement shall continue to be effective, until all transactions
entered into and obligations incurred hereunder have been completed and
satisfied in full.
(b) The Company shall not be entitled to terminate this
Agreement, unless Fidelity consents to such termination. If the Company pays
the Obligations in full after the third year of the Term with the proceeds of
a credit facility provided to the Company by a bank, the Company may
terminate this Agreement in connection therewith without the payment of any
early termination fee. The Company's acceptance of any such credit facility
shall, however, be subject to the terms of Section 11.5. In addition, if the
Company pays the Obligations in full after the second year of the Term solely
with the proceeds of the issuance and sale of shares of the capital stock of
the Company or funds generated from the Company's operations and not
constituting proceeds of indebtedness for money borrowed, the Company may
terminate this Agreement in connection therewith without the payment of any
early termination fee.
11.5 The Company hereby agrees that in the event the Company receives
an offer either during or at the end of the Term from a third party to
provide financing or factoring to the Company, which offer the Company
intends to accept, it shall require the offeror to reduce such offer to a
written commitment (the "new commitment"). In addition, the Company will (a)
notify Fidelity in writing of the identity of the offeror and the complete
terms of the new commitment and (b) if, within 30 days after Fidelity's
receipt of such notice and a signed copy of the new commitment, Fidelity
elects, in its sole discretion, to offer to terminate this Agreement in
accordance with Section 11.4 and match the new commitment, accept Fidelity's
offer.
11.6 Each and every provision, condition, covenant and representation
contained in this Agreement is, and shall be construed, to be a separate and
independent covenant and agreement. If any term or provision of this
Agreement shall to any extent be invalid or unenforceable, the remainder of
the Agreement shall not be affected thereby.
11.7 The Company agrees to indemnify, hold harmless and defend all
Indemnified Persons from and against any and all Indemnified Claims other
than those arising out of the gross negligence or willful misconduct of the
applicable Indemnified Person. THE FOREGOING INDEMNIFICATION SHALL APPLY
WHETHER OR NOT SUCH INDEMNIFIED CLAIMS ARE IN ANY WAY OR TO ANY EXTENT OWED,
IN WHOLE OR IN PART, UNDER ANY CLAIM OR THEORY OF STRICT LIABILITY, OR ARE
CAUSED, IN WHOLE OR IN PART, BY ANY NEGLIGENT ACT OR OMISSION OF ANY
INDEMNIFIED PERSON. Upon notification and demand, the Company agrees to
provide defense of any Indemnified Claim and to pay all costs and expenses of
counsel selected by any Indemnified Person in respect thereof. Any
Indemnified Person against whom any Indemnified Claim may be asserted
reserves the right to settle or compromise any such Indemnified Claim as such
Indemnified Person may determine in its sole discretion, and the obligations
of such Indemnified Person, if any, pursuant to any such settlement or
compromise shall be deemed included within the Indemnified Claims. Except as
specifically provided in this section, the Company waives all notices from
any Indemnified Person. The provisions of this Section 11.7 shall survive the
termination of this Agreement.
11.8 All grants, covenants and agreements contained in this Agreement
shall bind and inure to the benefit of the parties hereto and their
respective successors and assigns; provided, however, that the Company may
not delegate or assign any of its duties or obligations under this Agreement
without the prior written consent of Fidelity. FIDELITY RESERVES THE RIGHT TO
ASSIGN ITS RIGHTS AND OBLIGATIONS UNDER THIS AGREEMENT IN WHOLE OR IN PART TO
ANY PERSON OR ENTITY. Without limiting the generality of the foregoing,
Fidelity may from time to time grant participations in all or any part of the
Obligations to any Person on such terms and conditions as may be determined
by Fidelity in its sole and absolute discretion, provided that the grant of
such participation shall not relieve Fidelity of its obligations hereunder
nor create any additional obligation of the Company.
11.9 Any action permitted or provided to be taken or omitted by
Fidelity hereunder may be taken or omitted, as the case may be, by Fidelity
in its sole and absolute discretion, and any consent or waiver required of
Fidelity or determination to be made by Fidelity hereunder may be given,
withheld or made, as the case may be, by Fidelity in its sole and absolute
discretion.
11.10 THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS, WITHOUT REFERENCE TO THE
RULES THEREOF RELATING TO CONFLICTS OF LAW. THE COMPANY HEREBY IRREVOCABLY
SUBMITS ITSELF TO THE EXCLUSIVE JURISDICTION OF THE STATE AND FEDERAL COURTS
LOCATED IN DALLAS COUNTY, TEXAS AND AGREES AND CONSENTS THAT SERVICE OF
PROCESS MAY BE MADE UPON IT IN ANY LEGAL PROCEEDING RELATING TO THIS
AGREEMENT, ANY BORROWING HEREUNDER OR ANY OTHER RELATIONSHIP BETWEEN FIDELITY
AND THE COMPANY BY ANY MEANS ALLOWED UNDER STATE OR
FEDERAL LAW. ANY LEGAL PROCEEDING ARISING OUT OF OR IN ANY WAY RELATED TO
THIS AGREEMENT, ANY BORROWING HEREUNDER OR ANY OTHER RELATIONSHIP BETWEEN
FIDELITY AND THE COMPANY SHALL BE BROUGHT AND LITIGATED EXCLUSIVELY IN ANY
ONE OF THE STATE OR FEDERAL COURTS LOCATED IN DALLAS COUNTY, TEXAS HAVING
JURISDICTION. THE PARTIES HERETO HEREBY WAIVE AND AGREE NOT TO ASSERT, BY WAY
OF MOTION, AS A DEFENSE OR OTHERWISE, THAT ANY SUCH PROCEEDING IS BROUGHT IN
AN INCONVENIENT FORUM OR THAT THE VENUE THEREOF IS IMPROPER.
11.11 EACH OF THE COMPANY AND FIDELITY HEREBY (A) IRREVOCABLY WAIVES,
TO THE MAXIMUM EXTENT NOT PROHIBITED BY LAW, ANY RIGHT IT MAY HAVE TO A TRIAL
BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY AT ANY TIME
ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY TRANSACTION
CONTEMPLATED HEREBY OR ASSOCIATED HEREWITH; (B) IRREVOCABLY WAIVES, TO THE
MAXIMUM EXTENT NOT PROHIBITED BY LAW, ANY RIGHT IT MAY HAVE TO CLAIM OR
RECOVER IN ANY SUCH LITIGATION ANY SPECIAL, EXEMPLARY, PUNITIVE OR
CONSEQUENTIAL DAMAGES, OR DAMAGES OTHER THAN, OR IN ADDITION TO, ACTUAL
DAMAGES; (C) CERTIFIES THAT NO PARTY HERETO NOR ANY REPRESENTATIVE OR AGENT
OR COUNSEL FOR ANY PARTY HERETO HAS REPRESENTED, EXPRESSLY OR OTHERWISE, OR
IMPLIED THAT SUCH PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO
ENFORCE THE FOREGOING WAIVERS, AND (D) ACKNOWLEDGES THAT IT HAS BEEN INDUCED
TO ENTER INTO THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED HEREBY BASED
UPON, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS CONTAINED IN
THIS PARAGRAPH.
11.12 THIS AGREEMENT AND THE DOCUMENTS DESCRIBED HEREIN AND DELIVERED
IN CONNECTION HEREWITH REPRESENT THE FINAL AGREEMENT OF THE PARTIES AND MAY
NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE
PARTIES. NO MODIFICATION OR AMENDMENT OF OR SUPPLEMENT TO THIS AGREEMENT OR
TO ANY SUCH DOCUMENTS SHALL BE VALID OR EFFECTIVE UNLESS THE SAME IS IN
WRITING AND SIGNED BY THE PARTY AGAINST WHOM IT IS SOUGHT TO BE ENFORCED.
The undersigned have entered into this Agreement as of the date first
written above.
FIDELITY FUNDING, INC., WASTE RECOVERY, INC.,
a Texas corporation a Texas corporation
By: /s/ XXXXXXX X. XXXXXX By: /s/ XXXXXXXX X. XXXXXXX
Xxxxxxx X. Xxxxxx Xxxxx Xxxxxxx
President Authorized Representative
Mailing Address: Mailing Address:
00000 Xxxxx Xxxxx, Xxxxx 000 000 X. Xxxxx Xxxxxxxxxx
Xxxxxx, Xxxxx 00000 Xxxxxx, Xxxxx 00000
Street Address: Street Address:
00000 Xxxxx Xxxxx, Xxxx 000 000 X. Xxxxx Xxxxxxxxxx
Xxxxxx, Xxxxx 00000 Xxxxxx, Xxxxx 00000
TRADE, FICTITIOUS AND ASSUMED NAMES USED:
None.
TRADE, FICTITIOUS AND ASSUMED NAMES USED:
None.
